Delineation of the local labour markets in Poland using a novel nonparametric approach

Abstract

Delineation of local labour markets is a matter of utmost importance from the point of view of supporting sustainable development of regions. The development of local self-governance increases the need for information which is necessary for the development and realisation of economic and social development strategies, effective management as well as improvement of living conditions in a broad sense. Knowledge of the structure of local labour markets may turn out to be crucial when planning investments or taking decisions on trends in infrastructure development.

This paper presents results of an extensive delineation of local labour markets in Poland. The conducted work is the first of this kind since the establishment of free-market economy in Poland in 1989. An algorithm known as the European Algorithm for Regionalisation is first applied and critically reviewed. A novel algorithm is then proposed combining strengths of previous methods and addressing their shortcomings. Two versions of the algorithm were proposed distinguished on the basis of propensity for combining local labour markets during the execution of the algorithm.

The outputs of the European Algorithm for Regionalisation and the proposed algorithm based on strong and weak joining criteria were classified as satisfactory. However, the proposed algorithm was superior in identification of local labour markets corresponding to areas of extremely low or high densification of big cities. Moreover, the nonparametric nature and lack of requirements for initial assumptions as to the central units makes the proposed approach more reliable in comparison to previous methods.